Santos announced a 2013 net profit of $516 million after tax, in line with the previous year.
Santos Chairman, Ken Borda, said consistent execution of the company’s strategy had positioned Santos for a step change in earnings and cash flow as its transformational LNG projects were delivered.
“As the PNG LNG and GLNG projects commence production, Santos and its shareholders are poised to reap the rewards.”
“Our operating cash flow will more than double over the next two years as the PNG LNG and GLNG projects come on-line. We are focussed on rewarding shareholders as we strike a balance between higher dividends, debt repayment and ongoing investment for growth.”
“Santos will adopt a progressive dividend policy. As our production and earnings grow, we intend to initially increase the dividend per share to a level which is sustainable and then steadily increase or maintain our dividend each year,” Borda said.
The 2013 financial result reflects record sales revenue driven by higher crude oil sales volumes, and higher oil and gas prices, offset by lower interest income and higher DD&A, exploration and other expenses. The result includes non-cash net impairments of $28 million after tax. Excluding net impairments and other one-off items, underlying net profit was $504 million, down 17%.
Santos Managing Director and Chief Executive Officer, David Knox, said 2013 saw Santos make strong progress towards the completion of its two major growth projects PNG LNG and GLNG, both of which remain on schedule and whose capital cost estimates remain unchanged.
“PNG LNG construction is nearing completion, with the first LNG delivery now expected in the third quarter of this year.”
“The GLNG project is also making good progress and is now 75% complete, with first LNG expected next year on schedule. The project recently celebrated a major milestone with the completion of tunnelling of the marine crossing.”
“In 2013, Santos also achieved record sales revenue, the highest oil production in six years and strong operating cashflow, while adding to our future production potential through exploration discoveries in the Browse, Carnarvon and Cooper Basin unconventional,” Knox said.